Investment Nuggets by Mark Mobius

Meet Dr Mark Mobius, the undisputed Guru on emerging markets, with more than 30 years of experience, working and investing in Asia and other emerging markets. As President of the Templeton’s Emerging Markets Fund, Dr Mobius is the lead portfolio manager of funds such as Templeton BRIC Fund, Templeton China World Fund, Templeton Developing Markets Trust and Templeton Emerging Markets Small Cap Fund. In India, he manages Templeton India Growth Fund and the recently launched international fund, Templeton India Equity Income Fund. Although based out of Singapore, Dr Mobius spends 200 days a year travelling various countries ranging from South America to Asia.

As he sees it “Visiting companies in foreign nations is one of the most valuable ways to gain reliable information about a country or firm.” He is well known for his “value” style of investing. You are likely to find more insights from Dr Mobius from his books, The Investors’ guide to Emerging Markets, Passport to Profits and Mobius on Emerging Markets.

“There is in our business more and more of a tendency to look short term and to demand returns on a short-term basis. Now what has happened is that a lot of the institutional investors and even the retail investors have fallen back on indexing, because the famous efficient-market theory has taken hold, and a lot of people say, “Well, over the long run a management portfolio cannot beat an index portfolio.” So everybody now is measuring themselves against the index on daily, weekly, monthly, yearly basis, and if you are underperforming the index, then everybody’s unhappy. The problem with that is, what is the index? The index is the mob. It’s the emotional mob that goes after the most popular thing of the day, which as we’ve learned in the case of the tech crisis, the dot-com crisis, is very often wrong. The mob is often wrong.”

“Do not be afraid of taking risks. Without risk there is no way your portfolio can achieve superior investment returns. Risk is everywhere, it is something that appears dangerous not only to you but to everyone around you. But, at the same time, risk-taking must be carefully planned and researched so that your chances are better than 50/50. This is not roulette. It is not even skydiving (even though the intelligent skydiver will personally check his chute and perhaps strap on an extra one) because with good planning a failure will not result in death or total loss. Successful investing is grasping an opportunity, particularly when everyone around you is running the other way.”

“Make volatility your friend. All markets are volatile. They are like a combustible material. You can warm up gasoline to a certain temperature but once it reaches its combustion point all hell breaks loose. The market is a little lik e that. The difference is that the market survives to see another day. But these market explosions give us an opportunity to sell high and buy low since the manic-depressive nature of markets means that they will rise a heck of a lot more than they should and fall a heck of a lot more than they should too.”

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